Shannon O'Reilly is trying to decide whether to continue to take public transportation to work or to purchase a car. Before making her decision, she would like to compare the cost of using public transportation and the cost of driving a car. What activity measure should Shannon use as she estimates the cost of driving? What should Shannon view as incremental (variable or out of pocket)costs of driving from home to work? What are some fixed costs of driving a car? Suppose that if Shannon purchased a car, she would use it to estimate her vacation and lodging expenses? (a) The number of miles driven is an important activity measure in estimating the cost of driving. In comparing the cost of driving to work or taking public transportation, Shannon may also want to consider the cost of parking at work. The cost of parking may vary with the number of days at work or may be a flat rate per month. (b) Incremental costs of driving include gas, oil, maintenance, and tire expenditures. (c) Some capacity-related costs are taxes, depreciation, car registration, and insurance. (d) For a two-week vacation by car, two likely activity measures are number of miles driven and number of days (for lodging and meals).